NORWAY - Norway's Government Pension Fund - Global gained NOK309bn (US$51.3bn) in the second quarter, a record gain for the scheme, the Norwegian central bank said today. The pension fund also said it expanded its environmental focus to include water-related risks.
Total assets at the pension funds, also known as the Oil Fund, reached NOK2.4trn at the end of June 30 on the backs of rising equity markets, according to the fund's quarterly report.
Norges Bank Investment Management (NBIM) chief executive Yngve Slyngstad said: "Economic developments showed clear signs of stabilising in the second quarter and the uncertainty around the financial sector decreased. Liquidity is beginning to return to a number of fixed income markets."
The Oil Fund's investments returned 2.1 percentage points above the benchmark in the second quarter after three straight quarter of underperformance. The total fund returned 12.67% versus the benchmark return of 10.6%.
During the second quarter, the Oil Fund completed a two-year shift to increase its equity exposure to 60% from 40%.
Since the second quarter of 2007, the scheme has purchased over NOK1trn in equities; NOK641bn came from inflows of new capital while NOK369bn was transferred from the fixed income portfolio, the report said.
Also in the second quarter, the Oil Fund introduced water resource management as an area of focus since the potential of a global water shortage presents a financial risk to the fund.
NBIM's portfolio has exposure to 1,100 companies whose earnings could decline if a water shortage were to occur. The funds exposures total NOK265bn.
"In the future, securing access to the quantity and quality of water needed for production and complying with requirements for wastewater emissions may become important for more and more companies and their results," the report read.
The fund said investors should have access to information that allows them to evaluate the level of water-related risks in their portfolio.
Railways Pension Trustee Company chief executive Phil Willcock has quit the scheme after only 10 months to take up a position as head of AIG UK Life.
The Financial Conduct Authority (FCA) has launched a consultation on how to enable defined contribution (DC) savers to invest in patient capital via unit-linked funds.
The Pension Protection Fund has published its final levy rules for 2019/20 following a consultation launched in September.
The Competition and Markets Authority's (CMA) final report on the investment consultant market has been celebrated as having "real teeth" to produce better outcomes for members.